PSO buys 325,000 tons gasoline, jet fuel

13 December, 2012

Pakistan State Oil has bought 325,000 tonnes of gasoline and jet fuel for delivery over December to March, with gasoline volumes about 40 per cent higher than its previous purchase, industry sources said.

Pakistan State Oil has bought 325,000 tonnes of gasoline and jet fuel for delivery over December to March, with gasoline volumes about 40 per cent higher than its previous purchase, industry sources said.

The jet fuel imports would be the company's first since June.

PSO bought six cargoes of 50,000 tonnes each of 87-octane gasoline for delivery over Jan. 15 to March 15 at premiums ranging from $72.20 to $84.40 a tonne to Middle East naphtha quotes.

Four of the cargoes will be supplied by PetroChina while the other two will be supplied by Trafigura, the sources said.

PetroChina rarely supplies gasoline to Pakistan, and the last time it did was in June, one of them said. PetroChina is likely to load the cargoes from Fujairah, where it has recently leased storage, the source added. This is also the first time PSO has bought 50,000-tonne lot sizes of gasoline instead of its usual 35,000-tonne cargo sizes.

The company has increased tankage space for gasoline in its Kemari port in Karachi by 15,000 tonnes to satisfy increased domestic demand, a source familiar with the matter said.

“Demand for gasoline is going up, due to a shortage of CNG (compressed natural gas) and also higher prices for gas,” the source added.

“Especially in winter, the gas shortage is worse, which is also why the cargo sizes have been increased.”

Pakistan faces a circular debt problem, in which state utilities lose money from non-paying consumers and low electricity prices and cannot pay power generators, who in turn cannot pay gas suppliers, which has caused a gas shortage.

For jet fuel, the company bought just one 25,000-tonne cargo from Glencore for delivery over Dec. 20 and 31 at a premium of $4.73 a barrel above Middle East quotes. This is to fulfil demand from Afghanistan, the source said.

“The supply route to Afghanistan is open at the moment, but there are still some issues and formalisation, so (PSO) is not importing jet fuel at full swing,” the source said, with no elaboration.

Pakistan used to import about 25,000 tonnes of jet fuel every month, with about 90 per cent sold into Afghanistan.

But imports halted after the government suspended Nato supply routes to Afghanistan in November, 2011 after a cross-border Nato air attack killed 24 Pakistani soldiers.

They resumed in July after US Secretary of State Hillary Clinton apologised for the strike.